When is it too late to stop foreclosure? In other words, when is the absolute latest you can file bankruptcy and stop a foreclosure sale? The truth is, it’s not over until it’s over. You can file right up to the day of sale.

Understanding the Foreclosure Timeline

In a typical foreclosure situation, your lender will send you a notice of default and you still have an opportunity to repay the delinquent balance and rehabilitate the loan. The lender will set the deadline.

If you cannot or don’t repay the delinquent balance, the lender will proceed with foreclosure. Foreclosure usually begins 90 days after the last payment. After 120 days, the lender must issue you a notice of intent to sell. They will sell the home at a public auction. So long as the deed has not been transferred to someone else, you can stop the foreclosure at any time, including the date of the auction. Contact Dallas Bankruptcy Attorney at Allmand Law Firm PLLC today to learn more.

Declaring Bankruptcy to Delay the Sale

Once you petition the court for a bankruptcy, all creditor actions against you must immediately stop. This includes foreclosure. There are, however, limitations to this. You must be able to repay the arrearage, costs related to the foreclosure, and make future mortgage payments on your home. Stopping the sale does not mean stopping the foreclosure. It means stalling the sale.

Additionally, the injunction placed on your creditor can be lifted if the creditor can show that you either have no intention of making payments on your home or you don’t have the fiscal ability to repay what you owe. Even if the automatic stay is lifted, this will buy you some extra time.

Should I File Before or After Foreclosure?

For most Americans, bankruptcy is an unattractive option because it smacks of failure. After all, you should be able to repay your debts, right? But sometimes things happen that are outside your ability to control. Your spouse may become ill, or you may experience an unexpected injury. Not only are you losing income, but you also have medical expenses to worry about.

You are usually better off filing bankruptcy before your home is in foreclosure. This is because, in certain situations, your debt can survive bankruptcy. This (especially) includes tax debt accrued on the property.

One other thing to consider: While you’re in bankruptcy, which can take some time to work its way through the courts, your lender cannot collect mortgage payments. This will buy you some time to save money and financially regroup. If you wait until the foreclosure process is already in place, you can delay the sale of your home right up until the date it’s sold, but you will very likely have less time to save money. Your lender will likely petition the court to lift the automatic stay and proceed with the foreclosure process.

It’s important to understand your rights as a borrower. If you are facing wage garnishments, creditor lawsuits, and struggling to pay your mortgage, a skilled bankruptcy attorney can help you make the best decision for your situation.

Chapter 13 Bankruptcy Can Help You Save Your Home

Chapter 13 bankruptcy allows you to reorganize your debt. It is ideal for managing secured debts (like mortgages) that you are struggling to pay. In Chapter 13, you and your attorney are required to submit a repayment plan to the court. To save your home from foreclosure, this repayment plan must include any arrearage, homeowner’s association fees, and property taxes that are in arrears. Additionally, you will need to continue making payments on your mortgage.

One of the major benefits of Chapter 13 is that it can strip away second mortgages and home equity lines of credit (HELOC). These debts, which are secured against your home equity, can be converted into unsecured loans. Unsecured loans are considered the lowest priority in Chapter 13. You may be allowed to repay only some of the debt or the second mortgage may be stripped off completely.

When Is It Too Late to Stop Foreclosure? Ask a Dallas TX Bankruptcy Attorney

So when is it too late to stop foreclosure? Even if your home is in foreclosure, you have options. We can help. If you’re worried about losing your home, talk to us early in the process. We can help you understand your foreclosure defense options and determine your best path moving forward. Contact Allmand Law Firm PLLC today to learn more.